What is committed cost on a construction project?
Committed cost is money you have already promised to spend but have not yet been billed for: purchase orders placed, work orders issued, machines on hire. Budget minus actual cost minus committed cost is the true balance left on a project.
A project can look healthy on paid bills while the orders already placed have taken it over budget. Committed cost is the figure that shows this before the bills arrive.
Balance = budget − actual cost − committed cost
Budget 8.40 million. Actual cost to date 4.91 million. Orders placed but not yet received 0.62 million. The real balance is 2.87 million, not 3.49 million.
In ERP Infra
Budget, committed, actual and balance are shown side by side for every project and every site.
Cost overruns: how it worksLet’s put every site on one screen.
Tell us how many projects and sites you run. We will walk you through the system on a call and suggest where a pilot would pay back first.
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